2009. 1. 30

4Q 2008 Business Results 4Q 2008 Business Results & Outlook& Outlook

The business results for the 4th quarter of 2008 currently under

audit review are presented here for investors’ convenience. Hence,

please be advised that some of their contents may be altered in the

course of audit.

Forecasts and projections contained in this material are based on

current business environments and management strategies, and

they may differ from the actual results upon changes and

unaccounted variables.

Yearly Business Results 1

Quarterly Business Results 2

Profit Change Analysis 3

4Q 2008 Business Results 4

Divisional Results & Outlook 6

Appendix 9

Table of Contents

/ 13

Yearly Business Results

'07 '08

Sales OP Net income

1,426

13.6tn

16.7tn

1,182

'07 '08

Sales OP Net income

1,43010.8tn

14.5tn

764

1,003

686 1,003

686

1

Consolidated Non-Consolidated

(Unit:KRW bn) (Unit:KRW bn)

/ 13

Quarterly Business Results

LGC + LGPC

'071Q 2Q 3Q 4Q '081Q 2Q 3Q 4Q

Sales OP

253

379

245

2.59tn

3.10tn

253

2.90tn3.02tn

3.45tn

340

481

3.74tn

443

4.06tn

123

3.23tn

2

(Unit:KRW bn)

/ 13

Profit Change Analysis

443

123

’08. 3Q ’08. 4Q

-320

-88

Sales decrease

• Additional bonus

• Holiday remuneration

etc

One time expense

-46

-187

Inventory loss

3

/ 13

297

-2

(9.8)

399

(10.9)

443

4,065

’08 3Q

297

2

(8.6)

392

(9.9)

452

4,581

’08 3Q

(%)

(%) (2.1)(5.9)(0.4)(5.7)

-44.6%

(3.8)(7.4)(1.2)(7.4)

-51.1%

-61.8%

7.8%

YoY

62

-71

68

123

3,237

’08 4Q

62

-10

15

45

3,727

’08 4Q

-51.1%

-92.8%

-82.8%

5.4%

YoY

126

10

177

221

3,004

’07 4Q

126

-2

202

263

3,535

’07 4Q

Net Income

Equity Method Gains

Recurring Profit

Operating Profit

Sales

(Unit : KRW bn)

4

* Recurring Profit stands for “Profit from continuing operations before income tax”

* ‘Discontinued operation’ accounting method is not applied in this presentation material for avoiding investor’s confusion.

4Q 2008 Business Results Income Statements

Consolidated Non-Consolidated

/ 13

11.3

23.3

10.0

35.1

81.8

3,878

1,362

3,172

466

7,050

’07

10.3

22.8

10.1

58.6

111.4

4,044

2,368

4,507

591

8,551

’07

64.492.5Total Liabilities / Equity (%)

27.649.2Debt / Equity (%)

24.312.1Interest Coverage Ratio

24.521.7ROE (%)

4,8905,055Shareholder’s Equity

ROA (%)

(Borrowings)

Liabilities

(Cash and equivalents)

Assets

(Unit : KRW bn)

10.8

2,773

4,676

659

9,730

’08

13.9

1,350

3,147

522

8,036

’08

1,227EBITDA 1,853

5

Consolidated Non-Consolidated

Balance Sheets4Q 2008 Business Results

/ 13

15%18%12%

15%14%

14%

11%

12%11%

32%

31%28%

27%

28%32%

'07 4Q '08 4Q '08 3Q

ABS/EP

NCC/PO

Acrylate/

Plasticizer

PVC

Rubber/

Specialty Resin

2,3812,470

3,380

9.4

319

7.9

187 -85Operating Profit

-3.4Margin(%)

6

Divisional Results & Outlook Petrochemicals(Consolidated)

Business results Analysis

(Unit:KRW bn)

▣ Inventory loss caused by significant product prices drop within

a short period

▣ Rapid oil price decline reflected into product prices immediately

▣ Product prices are expected to rebound thanks to inventory

build-up activities after Chinese new year holidays

▣ Low-cost raw materials will improve product spread and

profitability

▣ Weak demand and delay in customers’ buying activities

▣ High-cost law material inventory worsened profitability due to

lagging effect.

• Analysis

• Outlook

/ 13

74% 64% 77%

26%36%

23%

07 4Q 08 4Q 08 3Q

Battery

Electronics/OpticalMaterials

750

670 654

7

16.4

107

23.010.2Margin(%)

17268Operating Profit

▣ Electronics & opticals

Achieved solid sales/profit on the back of cost competitiveness,

despite of weak demand in the front line industry

▣ Battery

Big jump in sales/profits thanks to starting new expansion &

sales increase to major customers

▣ Electronics & opticals

Maintain solid profit by cost cutting after ultra wide polarizer

line operating

▣ Battery

Strengthen cost competitiveness & increase M/S in strategic

customers

I & E Materials(Consolidated)Divisional Results & Outlook

Business results Analysis

(Unit:KRW bn)

• Analysis

• Outlook

/ 13

52%59%60%

48%

40% 41%

07 4Q 08 4Q 08 3Q

Liv ingSolutions/AutomotiveSolutions

HousingSolutions

619

8

619

551

5.4

33

2.1

13 -27Operating Profit

-4.8Margin(%)

Divisional Results & Outlook

Business results Analysis

(Unit:KRW bn)

Industrial Materials(Consolidated)

▣ Decrease in sales

- H S : Decrease in demand due to continuous depression and

accelerated liquidity crisis of the construction industry

- L S : Volume decrease caused by global economy slowdown

▣ Increase in expenses for marketing investment of new products

and oversea business expansions.

▣ Recovery is expected after completion of the construction

industry restructuring & effective real-estate policy enhancement

by government

▣ Strengthen business competitiveness by innovation of product

and cost structures

• Analysis

• Outlook

/ 139

(Unit: KRW bn)

1Q 2Q 3Q 4Q Total 1Q 2Q 3Q 4Q Total

3,041 3,384 3,566 3,535 13,525 4,014 4,386 4,581 3,727 16,708

258 292 374 263 1,187 401 527 452 45 1,426

2,038 2,300 2,396 2,381 9,114 2,835 3,131 3,380 2,470 11,816

NCC/PO 483 630 696 727 2,536 884 977 1,074 703 3,638

Synthetic Rubber/

Specialty Resin272 297 324 296 1,188 353 400 516 434 1,703

PVC 248 301 315 326 1,190 370 412 493 335 1,609

ABS/EP 756 790 793 770 3,109 891 965 908 692 3,456

Acrylate/Plasticizer 278 282 268 262 1,091 337 379 388 306 1,410

Operating Profit 232 217 289 187 925 285 393 319 -85 912

460 530 595 670 2,255 620 654 654 750 2,678

Optical/Electronic 337 385 437 504 1,664 462 516 511 492 1,981

Battery 127 154 169 175 625 165 148 154 272 739

Operating Profit 7 31 64 68 170 84 102 107 172 466

540 616 560 619 2,335 569 662 619 551 2,401

Building/Decorative 296 350 327 373 1,347 320 365 367 284 1,336

Living/Automotive 245 268 234 248 996 250 298 256 267 1,072

Operating Profit 30 40 29 13 112 41 40 33 -27 88

2007 2008

Sales

Operating Profit

Petrochemicals

I & E Materials

Industrial Materials

Appendix Sales & Operating Profit(Consolidated)

* Difference between total of all business divisions and total of each business unit indicates inter-company business sales.

/ 1310

(Unit: KRW bn)

1Q 2Q 3Q 4Q Total 1Q 2Q 3Q 4Q Total

2,380 2,645 2,767 3,004 10,795 3,448 3,738 4,065 3,237 14,488

127 163 253 221 764 379 481 443 123 1,430

1,498 1,647 1,743 1,906 6,794 2,397 2,607 2,961 2,075 10,039

NCC/PO 376 491 570 682 2,120 884 985 1,085 720 3,674

Synthetic Rubber/

Specialty Resin153 168 185 238 744 347 381 503 395 1,626

PVC 206 229 220 239 894 259 286 341 237 1,124

ABS/EP 495 489 512 496 1,992 583 604 653 430 2,271

Acrylate/Plasticizer 267 269 257 251 1,044 323 350 378 294 1,344

Operating Profit 89 100 171 152 511 262 350 310 -14 907

438 510 590 602 2,140 611 656 669 769 2,705

Optical/Electronic 311 359 426 429 1,525 445 505 505 478 1,933

Battery 132 159 175 183 649 173 160 174 304 811

Operating Profit 7 26 57 61 152 80 98 105 170 453

500 563 505 572 2,140 518 564 540 469 2,091

Building/Decorative 292 340 316 365 1,312 312 344 351 269 1,276

Living/Automotive 210 226 191 209 835 208 221 192 202 822

Operating Profit 30 36 24 11 101 39 37 31 -20 86

2007 2008

Sales

Operating Profit

Petrochemicals

I & E Materials

Industrial Materials

Appendix Sales & Operating Profit(Non-Consolidated)

* Difference between total of all business divisions and total of each business unit indicates inter-company business sales.

/ 1311

’07

995(73%)

367(27%)

235

94

328(24%)

-

780

253

1,033(76%)

1,362

(100%)

Balance

785(60%)

-205790(46%)

Long-term

FRN

Others

Foreign

Currency

C P

C B

Others

225

90

-65

158

170

252

530(40%)

193560(54%)

Short-term

315(24%)

93421(20%)

-660340

--220116

-

560

369

1,000(76%)

1,315

(100%)

’08 (P)

-104

-12

Changes

929(80%)

1,350

(100%)

’08

Total

KRW

Currency

-160ABS refund

-713-484CAPEX

236467Others

-534-459Working Capital

402437Depreciation

1,003686Net Income

394647Operating/Investing

466

-73

-224

-297

116

’07

-339Financing

466Beginning

-167Dividend

-12Borrowings

522End

’08

Appendix Borrowings & Cash Flow(Non-consolidated)

Borrowings Cash Flow

(Unit : KRW bn) (Unit : KRW bn)

☞ The % is calculated to total borrowings. Discounts of bond is not included.Currency swap included

/ 1312

26631090168Total

2134128Equity Investment

51453638Maintenance

19423142122New/Expansion

I & E Materials

805

48

334

423

139

-

135

4

104

12

60

32

253

3

95

156

’08 Plan

484

28

260

195

100

-

100

1

67

-

57

10

227

16

68

142

’07 Results

2271Equity Investment

263265Maintenance

114Equity Investment

7187Maintenance

110Equity Investment

5756Maintenance

-39Equity Investment

8584Maintenance

--New/Expansion

Common Expenses

72101Total

713591Total

427255New/Expansion

Total

1615New/Expansion

Industrial Materials

7381Total

302241Total

217118New/Expansion

Petrochemicals

’08 Results’06 Results

Appendix Capex Plan & Results(Non-consolidated)

(Unit : KRW bn)

/ 13

Price TrendsAppendix

13

873

1,036

381535

938

1,322

1,496

1,720

1,800

1,0271016

813

691691

581546

616617551

13811,462

1,307

1,2031,206

1,050

1,1511,129

1,331

1,0901,060

1718

1,6811,632

1,477

1,377

1,3051,2841,294

1,371

1,213

1,119

1,858

1,3641,296

1,600

1,364

1,199

1,111

'061Q

2Q 3Q 4Q '071Q

2Q 3Q 4Q '081Q

2Q 3Q 4Q

Naphtha Ethylene

HDPE(Film) LDPE

1,056

1,186 1,197

627

2,032

949

2,109

1,417

9831,011928

854841910

798775

1,973

1,7001,6241,6351,633

1,569

1,4681,456

1,0991,002

1,9611,756

1,7331,688

1,638

1,584

1,5861,586

1,4801,384

'061Q

2Q 3Q 4Q '071Q

2Q 3Q 4Q '081Q

2Q 3Q 4Q

PVC 2EH ABS

• The prices are average price of CFR FE Asia for general grade in each product group.

(Unit:U$/MT) (Unit:U$/MT)